Professional Documents
Culture Documents
Irwin/McGraw-Hill
Irwin/McGraw-Hill
Task Force Clip Art included in this electronic presentation is used with the permission of New Vision Technology of Nepean Ontario, Canada
Irwin/McGraw-Hill
Planning
Planning is the process of deciding what . actions should be taken in the future.
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Irwin/McGraw-Hill
Planning
Planning involves making decisions. Decisions are arrived at by--
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recognizing that a problem or an opportunity exists specifying and ranking the criteria to be used to determine the best solution identifying alternative ways of addressing the problem or opportunity analyzing the consequences of each alternative comparing these consequences to each other and the criteria so as to decide which is best
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
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Accounting information
Consists of
Nonaccounting information
Operating information
Irwin/McGraw-Hill
Financial accounting
Management accounting
Tax accounting
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Planning
Irwin/McGraw-Hill
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Planning
Implementation
Irwin/McGraw-Hill
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Planning
Implementation
Control
Irwin/McGraw-Hill
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Planning
Implementation
Appropriate action
Control
Feedback
Plan revision
Irwin/McGraw-Hill
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Assets Current assets: Cash Marketable securities Accounts receivable, net Inventories Prepaid expenses Total current assets
Liabilities and Owners Equity Current liabilities: Accounts payable $ 5,602 Bank loan payable 1,000 Accrued liabilities 876 Estimated tax liability 1,541 Current portion of longterm debt 500 Total current liabilities $ 9,519
Current Section
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Slide 1-9
Assets Liabilities and Owners Equity Noncurrent assets: Noncurrent liabilities: Property, plant, equipment Long-term debt, less at cost $26,946 current portion $ 2,000 Less: Accumulated Deferred income taxes 824 Depreciation 13,534 Total liabilities 12,343 Property, plant, equipment net 13,412 Owners equity: Investments 1,110 Common stock 1,000 Patents and trademarks 403 Additional paid-in capital 11,256 Goodwill 663 Total paid-in capital 12,256 Retained earnings 13,640 Total owners equity 25,896 Total liabilities and owners Total assets $38,239 and owners equity $38,239
Noncurrent Section
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Slide 1-10
Assets are economic resources which are owned by a business and are expected to benefit future operations.
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
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Liabilities are obligations of the entity to outside parties who have furnished resources
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Income Statement
HOLDEN COMPANY
Income Statement For the Year 1999 (000 omitted)
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Sales revenue Less cost of sales Gross margin Less operating expenses Income before taxes Provision for income taxes Net income
Irwin/McGraw-Hill
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Useful to present and potential investors and creditors in making rational investment and credit decisions Comprehensible to those who have a reasonable understanding of business and economic activities and are willing to study the information with reasonable diligence About the economic resources of an enterprise, the claims to those resources, and the effects of transactions and events that change resources and claims to those resources About an enterprises financial performance during a period
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
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Liabilities and Owners Equity Liabilities $12,343 Owners Equity Paid-in capital 12,256 Retained earnings 13,640 Total liabilities and owners equity $38,239
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Slide 1-15
Income Statement For the Year 1999 Sales revenue Less cost of sales Gross margin Less operating exp. Income before taxes Provision for taxes Net income, 1999 $75,478 52,222 23,351 10,785 12,466 6,344 $ 6,122
Liabilities and Owners Equity Liabilities $12,343 Owners Equity Paid-in capital 12,256 Retained earnings 13,640 Total liabilities and owners equity $38,239
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Slide 1-16
Income Statement For the Year 1999 Sales revenue Less cost of sales Gross margin Less operating exp. Income before taxes Provision for taxes Net income, 1999 $75,478 52,222 23,351 10,785 12,466 6,344 $ 6,122
Liabilities and Owners Equity Liabilities $12,343 Owners Equity Paid-in capital 12,256 Retained earnings 13,640 Total liabilities and owners equity $38,239
Irwin/McGraw-Hill
Statement of Retained Earnings Retained earnings Add net income Less dividends Retained earnings $13,640 6,122 19,762 4,390 $15,372
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Income Statement For the Year 1999 Sales revenue Less cost of sales Gross margin Less operating exp. Income before taxes Provision for taxes Net income, 1999 $75,478 52,222 23,351 10,785 12,466 6,344 $ 6,122
Liabilities and Owners Equity Liabilities $12,343 Owners Equity Paid-in capital 12,256 Retained earnings 13,640 Total liabilities and owners equity $38,239
Irwin/McGraw-Hill
Statement of Retained Earnings Retained earnings Add net income Less dividends Retained earnings $13,640 6,122 19,762 4,390 $15,372
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Condensed Balance Sheet As of December 31, 2000 Assets Current assets Building and equip. Other assets Total assets Statement of Retained Earnings Retained earnings Add net income Less dividends Retained earnings $13,640 6,122 19,762 4,390 $15,372 $24,062 14,981 3,207 $42,250
Liabilities and Owners Equity Liabilities $14,622 Owners Equity Paid-in capital 12,256 Retained earnings 15,372 Total liabilities and owners equity $42,250
Irwin/McGraw-Hill
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Condensed Balance Sheet As of December 31, 2000 Assets Current assets Building and equip. Other assets Total assets Statement of Retained Earnings Retained earnings Add net income Less dividends Retained earnings $13,640 6,122 19,762 4,390 $15,372 $24,062 14,981 3,207 $42,250
Liabilities and Owners Equity Liabilities $14,622 Owners Equity Paid-in capital 12,256 Retained earnings 15,372 Total liabilities and owners equity $42,250
Irwin/McGraw-Hill
Summary
An organization has four types of accounting information:
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Operating information, which has to do with the details of operations Management accounting information, which is used internally for planning, implementation, and control Financial accounting information, which is used both by management and external parties Tax accounting information, which is used to file tax returns with taxing authorities
Irwin/McGraw-Hill
The McGraw-Hill Companies, Inc., 1999
Chapter 1
The End
Irwin/McGraw-Hill